EUR/GBP leaps to multi-day highs near 0.8800

EUR/GBP moves higher and approaches the 0.8800 mark.
GBP sell-off is propping up the downside momentum in the cross.
Confusion on COVID-19 crisis handling by government weighs on GBP.

Pablo Piovano FXStreet

The selling bias around the British pound is now helping EUR/GBP to reclaim the 0.8800 neighbourhood and record at the same time fresh multi-day tops.

EUR/GBP edges higher on coronavirus crisis

EUR/GBP has resumed the upside at the beginning of the week, fully reversing Friday’s pullback and charting at the same time a bullish ‘outside day’.

The cross has managed to gather extra pace on Monday on the back of the renewed and strong selling pressure hitting the sterling. Indeed, rising uncertainty and scepticism surrounding the latest set of measures unveiled by No.10 aimed to relax the lockdown have triggered a fresh wave of GBP selling, propelling the cross to new 5-day peaks.

In the docket, flash Q1 GDP figures in the euro area, Germany and the UK will be the salient events later this week.

What to look for around GBP

The recovery in the British Pound appears to have met quite a significant barrier around the 1.2600 neighbourhood vs. the greenback (200-day SMA) and the 0.8860 area vs. the euro (April peaks). Moving forward, the sterling is expected to remain under pressure against the backdrop of rising confusion over the handling of the coronavirus crisis by the UK government and the potential re-opening of the economy, all amidst the forecasted deep recession the country is expected to face in the first half of the year. Further weakness is expected to hit the quid over the prospect of hard UK-EU trade negotiations and the tangible probability that the BoE could pump in extra stimulus at the next meeting.

EUR/GBP key levels

The cross is gaining 0.67% at 0.8787 and faces the next resistance at 0.8863 (high Apr.6) seconded by 0.9019 (monthly high Oct.20 2019) and then 0.9324 (2019 high Aug.12). On the flip side, a drop below 0.8670 (monthly low Apr.30) would expose 0.8655 (100-day SMA) and then 0.8595 (monthly high Jan.14).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold picks pace, flirts with $5,000

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and pushing higher towards the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.